Multimedia Research Group is one of the more credible IPTV watchers and its latest report says that service revenue in IPTV will grow to $46 billion by 2014, as IPTV amasses 102 million customer homes. By then more than 23 IPTV operators will have over 1 million subscriber homes and the market will be growing at a 25% compound annual growth rate (CAGR). We say that MRG is credible because of its thorough approach, but IPTV can just as easily be stopped in its tracks by OTT offerings which will emerge in that time frame as any other Pay TV offering, and we don’t think you can legislate against that.
The MRG report says that IPTV operators are now switching to use more fiber in high-competition markets but relying on advanced DSL such as channel bonding and VDSL2 in markets where it is not up against digital cable and DOCSIS 3.0.
Eastern Europe is one of the fastest moving markets, which it says is heading for early maturity, and observes that as late as 2007, Eastern Europe had only a few IPTV trials or startups, whereas now, it has 16 fully operating IPTV operators and another 3 to 6 in their trial phase.
By 2014, MRG says that Europe will have 45% of the global market, Asia 31%, North America 19% and the Rest of the World about 5%. The report ignores network backhaul, home gateweays and encoders, but tracks the rest of capex spending, and says this will grow from $3.1 billion in 2010 to $5.1 billion in 2014, as service revenue jumps from $17.5 billion to $46 billion.
The report also highlights spending on set top boxes and says that for many IPTV operators, these make up over 70% of CapEx expenditures and reasons that we can expect greater penetration of hybrid devices with IPTV and digital terrestrial/OTT set tops.
In the US it says that Verizon has stopped signing new franchise agreements outside its existing footprint, and that this means it will switch from its QAM/IPTV architecture to an all IPTV after 2011.